Forrester Marketing Forum 2009 – The Future of TV Advertising

I give full credit for my interest in technology and media to my father. He was a self-taught electronics engineer. That’s right self-taught. He had an amazing capacity as well as the courage to take anything apart to understand how it works. He could also put it back together. This was particularly true about televisions. It was the age of vacuum tubes, resisters and rectifiers powering gigantic cathode-ray tubes.

His reputation for this talent quickly got around and when someone’s TV went on the fritz they would call my dad. I would frequently tag along with him as he went to someone’s home and loaded the set onto the station wagon. From there it would go into his workshop, a magical room with oscilloscopes, meters, soldering guns, old TVs, spare parts and a file cabinet of schematics. The schematic was the map of the electronics inside. What we would today call code. It used a special language of symbols to communicate functionality, flow and the interface of these crude devices.

Electronic Schematic for Television

In those days there were only 3 television networks; ABC, NBC and CBS, and maybe 10 stations. My current Comcast channel lineup has 215 choices! There’s a station for every thing you could imagine and it’s on 24 hours a day. I watch only about 5 of those 215 stations during any given week, but because of the current business model, I pay for all of them.

The main reason for having that box, sorry, flat screen, in your home is to sell you something. It’s called commercial television for good reason. Yes I know, there’s the DVR that allows you to fast forward through all those commercials, but no matter how hard you try, you cannot fully escape the dreaded “spot.” Damn those agencies and their clients.

At the end of the first day of the recent Forrester Marketing Forum in Orlando, a panel discussion was held entitled The Future of Media. It was moderated by Forrester’s David Card (VP, Principal Analyst) and included a TV exec, Greg Clayman (EVP-MTV Networks), a media advertising businessman, David Verklin (CEO, Canoe Ventures), and a consumer product goods VP, Annis Lyles (Coca-Cola, North America). I had the good fortune to have lunch with Mr. Clayman earlier that day and we engaged in an interesting discussion on television, entertainment and distribution. I found him to be gracious and smart, while very much open to my thoughts and opinions. He is remarkably grounded in the basics of his business while at the same time looking out over the horizon in search of the next model. He has a massive job that spans all kinds of content and opportunity. I was impressed with his clarity and how he is carefully charting a course for the proper confluence of TV, online and mobile as a successful way forward.

The panel began and Mr. Card was determined to find out how effective TV advertising is becoming. The discussion was dominated by Mr. Verklin who was forceful and excited, proclaiming that “TV is getting back in the game!” He sounded like a cross between Steven Ballmer of Microsoft and George Castanza. “I’m back baby, I’m back.” I appreciated his energy, but he’s focus is on transforming the advertising experience on TV, not the content. Mr. Verklin wants to turn TV into a technology platform with a decision engine where marketers can target, measure and execute inside that platform to reach the right audience. The example he used over and over was if you have a dog in the house you should see an ad for dog food, not cat food. He calls it Community Addressable Messaging and outlines three components.

Interactive advertising

Addressable advertising

Data overlay

So the promise once again is that TV will be a trackable, measurable platform. I’m skeptical. I work in financial services. We know a little something about the complexity of third party data overlays on top of dozens of consumer segments across databases with billions and billions of rows. It’s not unheard of for FI’s to score their entire database of customers several times per day and when one of them logs into the website or calls the service center customers are identified in sub-milliseconds and a decision is made on what to show them at run time.

Mr. Verklin talks about targeting the 51st state. The 18% of households that make over $100,000. As a marketer I would love to reach that demographic, but how much TV are they even watching? Isn’t the bigger opportunity with the perpetual intermediate of the TV audience, middle America? What about tracking across channels and stacking your message the way online ad networks can do?

Mr. Clayman was much more on point with his comments. MTV is balancing broadcast, online, retail and mobile distribution for the greatest profit. As a content owner/publisher, his view must be different. For him content is king and careful stewardship is critical. He is fully aware of how he makes money, so of course he will be interested in these new platform ideas as a way to increase ad revenues.

Ms.Lyles, on the product side, has become a content producer from time to time in order to distinguish her brand and bring it appropriately to a particular medium. Pushing Coke is paramount and she seemed determined to leverage all media to achieve success. Her firm has brought traditional and digital media buying together.

Mr. Verklin says that online is making TV raise it’s game. Really? Well I’m glad something is helping at least lift the bar off the ground. Network TV programming, and with it advertising, has been in a downward spiral for years, driven by decades of inertia. A personal note here. I don’t despise television programming. On the contrary, I think there’s lots of good stuff out there, and I realize I am no longer the target.

It was a healthy discussion and I was quickly transported back to 1976 and the film Network where Howard Beale, a lunatic news anchor had this to say about television.

We deal in illusion, man! None of it’s true. But you people sit there—all of you—day after day, night after night, all ages, colors, creeds. We’re all you know. You’re beginning to believe this illusion we’re spinning here. You’re beginning to think the tube is reality and your own lives are unreal. You do whatever the tube tells you. You dress like the tube, you eat like the tube, you raise your children like the tube, you think like the tube. This is mass madness, you maniacs! In God’s name you people are the real thing! We’re the illusions. So turn off this goddam set! Turn it off right now. Turn it off and leave it off. Turn it off right now, right in the middle of this sentence I’m speaking now…

I plan on following Howard Beale’s advice, but will watch the progress of Canoe Ventures closely.